CNN's "We Were Warned": the bright side /
Jitters about energy, debt and the housing market /
Anarchism and the peak oil argument /
Food, sustainability, and the environmentalists /
Investments based on peak oil? - yes

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Peak oil - Mar 22

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Many more articles are available through the Energy Bulletin homepage

Fmr. GOP Strategist Kevin Phillips on "American Theocracy: The Peril and Politics of Radical Religion, Oil, and Borrowed Money in the 21st Century"
(transcript, audio and video)
Amy Goodman, Democracy Now
...A generation ago [former Republican strategist Kevin Phillips] wrote "The Emerging Republican Majority" which Newsweek described as the "political bible of the Nixon administration." Throughout the 1970s and 1980s Phillips was viewed as one of the GOP's top theoreticians and electoral analysts.

But no more.

Phillips is now warning that the party - and the country as a whole - is headed for potential disaster. Phillips sums up his concerns in the title of his new book: "American Theocracy: The Peril and Politics of Radical Religion, Oil, and Borrowed Money in the 21st Century."

A review in Sunday's New York Times said the book may be "the most alarming analysis of where we are and where we may be going to have appeared in many years."

...AMY GOODMAN: Kevin Phillips, you talk about radical religion, about debt, and about oil, about this being an oil war. You also talk about peak oil. That's not talked about very much in the mainstream. Explain.

KEVIN PHILLIPS: The peak oil idea is that just as the United States oil production peaked in 1971, that we have a limited amount of oil globally, and that it’s something that can't be re-created. It’s running out. And the expectation of some is that the oil production of the non-OPEC countries will peak at some point during the 2010s, and that then the production of OPEC itself will peak in the 2020s or 2030s. Now, some people think that Saudi production has already peaked.

Now, if you believe this, and it’s possible, then we face an enormous convergence, again under specific oil-related circumstances, of a global struggle for natural resources as the price of oil climbs, as we turn the armed services into a global oil protection service, which has been happening, and as we see the administration refuse to grapple with the need to really curb oil consumption in the United States, which is mostly through transportation and especially motor vehicles.

And I just have a sense, as many others on the conservative side do, this administration has no strategy to deal with these converging problems, be they foreign policy, military, oil, debt. They are like the three little monkeys on the old jade thing - the one sees no evil, one speaks no evil, and one hears no evil. Do they know anything? You know, that's an open question.

AMY GOODMAN: We see in Washington an oiligarchy. I mean, you have President Bush, who is a failed oil man himself; Cheney, former head of the largest oil services corporation in the world, Halliburton; Condoleezza Rice was on the board of Chevron for more than a decade. And you can go on from there. But what is the significance of this for this country and the world?

KEVIN PHILLIPS: Well, what I would like to do is broaden that, because you’re absolutely right, and the Republicans are the principal vehicle of this. But they are by no means the only vehicle, when Lloyd Bentsen was the Vice Presidential nominee for the Democrats. He was somebody very closely connected to the oil industry. It turns out that Al Gore's father was closely connected to the oil industry, and he continued the relationship with Armand Hammer of Occidental, and as a result, David Ignatius of the Washington Post wrote a big piece back several years ago saying we really had almost everybody in the 2000 election was oil-connected. It wasn’t just the two Republicans. It was Al Gore, too.

It is such a power center in the United States, especially now that the South and Sunbelt have become most important, because that's where the bulk of the oil is, that they’re into both parties, enormously powerful in Congress. There is an oil and petroleum culture in the United States that extends back 150-200 years into probably half of our states. This is no criminal conspiracy or anything. This is just a major resource, having evolved as something that's part and parcel of the American economy and American supremacy. And you can’t just wish it away. It’s a vested interest of the first order.

AMY GOODMAN: The war in Iraq was over oil?

KEVIN PHILLIPS: I think it was principally over oil. If you - and let me qualify that by saying I think a certain amount of the reason for the war in Iraq was a larger geo-strategic situation in which we were going to have to leave Saudi Arabia. And the way to develop an alternative oil supply and base was to aim at Iraq. Now, that went beyond purely oil as a consideration.

...if I can make bold with your microphone for a minute, there should be some thought among everybody in the United States -- progressives, conservatives, serious centrists, whatever you want to say -- about how it becomes clear that this man really cannot function as president. We can deal with that situation. I don't happen to believe impeachment is the answer. This has become so sort of trivialized after Clinton and Nixon and the “I'm going to get you because you got us” sort stuff. I think we have to think far beyond that.


KEVIN PHILLIPS: We need some kind of coalition government now. Before I get into too much trouble for this, let me go back to Britain between the wars, World War I and II, when they were really on the skids. The old parties lost their validity. They were fragmenting. There were small parties, third parties coming up. So they frequently governed by coalition governments. They had one at the end of World War I. They had another for quite awhile during the 1930s.
(20 March 2006)
Does the Phillips's suggestion for a coalition government surprise other people as much as it does me? And yet it seems to make sense. Conventional political categories of left and right seem to be less and less relevant in the face of peak oil, etc. See The Politics of Survival by Kurt Cobb. -BA

"We Were Warned": Professor Goose sees the bright side

Professor Goose, The Oil Drum
...I think we among the supposed PO cognoscenti have to remember that this program was not that threating of a thought experiment, easy to consume and, in this case, this "idea pabulum" exposes people to ideas that they maybe had not thought about before.

It wasn't aimed at us. It was aimed at people who haven't thought about this yet. It was gentle.

In fact, this kind of idea pabulum could be viewed as a (very) necessary step in the changes in awareness and consciousness-construction that could lead to actual incremental changes in actual behavior in a certain part of the American populace down the line.

I am sitting in my conference hotel tonight, ill with some sort of stomach bug, I downloaded the .torrent of the program, and watched with some anticipation, even if I was horizontal the whole time. I was hoping for a home run, a program that integrated the whole of the peak oil message and took it to the masses.

What did I find? Instead, I found the beginnings of a message, the beginnings of an emergence and integration of the ideas of the sacrifice and potential suffering this harbinger of the meme beheld, but constructed in a nice, safe sanitary package for easy consumption.
(19 March 2006)
More debate on the CNN documentary at a peakoil-dot-com forum. Like Professor Goose and Ibon at peakoil-dot-com (here and here, I'm positive about the CNN documentary. As Ibon says:

If peak oil was a mental dilemma amongst a small group of intellectual elites then many of these criticisms of course would be accurate. But peak oil is a problem of scale that effects every human being, including all those 90% who aren't yet aware of it or whose unconscious is not yet ready to hear it. Even the most cohesive factual documentary on peak oil wouldn't have changed that. Engaging the masses toward a collective cultural shift should be the main focus. It's not a choice of a CNN peak oil lite vs. a hard-hitting independent or BBC documentary. It's actually all of the above, inclusive. We need all levels of documentaries on this subject covering the whole range of presentations from the beginner up to the expert, from a milder introductory presentation as per CNN to hard-hitting knock-you-off-your-feet versions as well.

. -BA

Jitters (energy, debt and the housing market)

James Howard Kunstler, Clusterf*ck Nation
An acquaintance told me a weird story yesterday. Let's call him "E." He runs an Internet consulting company here in Saratoga Springs. It employs about twenty-five people in a downtown building E put up a few years ago.

Last month a freak windstorm ripped through here and took down the electric power for three days. E lost communication with the payroll service (a separate company) that issues his employee's salaries. The storm happened in the middle of the day, Friday, payday.

The power came back on Sunday night, and on Monday two of E's employees each asked for private meetings with the boss. Because of the storm, they said, the payroll company had failed to make electronic salary deposits in their checking accounts. They were concerned because they were late on their mortgage payments and without the past week's electronic paycheck, they couldn't pay their mortgages.

E told me that these were "high-level employees" with substantial salaries who were both living in "very high-end homes," which around here would mean around a half-million dollars (and I know that in some parts of the US, like Washington, DC, or San Francisco, a half-million barely gets you a "pre-owned" raised ranch). He said he was shocked to discover that his executives were living from paycheck to paycheck, in houses that by normal criteria (i.e. pre-bubble standards) they probably couldn't afford.

"What if something happened to me?" E said. "What if I was hit by a bus? That would be it for the company. That would be the end of their paychecks, and what if they didn't find another job almost immediately? I don't want to interfere in their personal affairs, but I can't help feeling that I really need to talk to them about this."
(20 March 2006)

Anarchism and the peak oil argument
An anarchist analysis of what peak oil means for the fight for a free society

Terry S Tuesday, Anarkismo

...It is essential that Anarchists are aware of and understand this issue [Peak Oil] and it's far reaching consequences and are not caught off guard and are ready to take advantage of the changes that will occur to bring about a better world, rather than allow society to be led down the destructive path of capitalists and other dominating power structures.

2. Background to Peak Oil
Some of the references that I have seen of Peak Oil in anarchist writings appear to dismiss it as some sort of capitalist inspired shortage or something. The evidence does not indicate this at all. Also in the mainstream press, it tends to be dismissed by economists, who generally have no grounding in any scientific knowledge, readily ignore physical fact and typically claim there is plenty of oil left and the market can always provide anyhow -usually out of thin air. However it would seem that those in power are using the corporate media to confuse the public about it so as not to disturb the status quo or rather disturb the ability to extract as much profit for as long as possible and retain the reins of power. Nevertheless it is a bit disappointing to see pretty much a lack of serious consideration given to it in anarchist writings considering it's importance. ...

3. What does it all mean?
So what does all this mean? Surely there are replacements and what has it to do with anarchists anyhow. We are interested in workers, rights and freedom, hardly oil? Well Peak Oil does not mean there will be no oil left. It means the End of Cheap Oil and this is central to the whole idea. And in cheap, I do not necessarily mean money as such. It's not a question of charging lower prices for it or whatever in anarchist heaven. Basically what has happened, most of the promising areas of the world have been explored, all the big fields were found long ago and pressed into production. The peak in discovery of oil fields occurred in the mid 1960s and the number and sizes of fields found has fallen steadily since then. All the easy or at least most of the easy oil is gone.....

6. Energy and Capitalism
...So for all of us reading this we have lived through the upside of the Peak. The physical consequences of the downside will give rise to a new set of forces acting on politics and society. This is the sort of thing science fiction writers write about which is largely trying to imagine politics and society under the effects of new and often novel forces and or technologies. Many have made the analogy of the well known biological effect, when nutrients are supplied to a bacteria culture on a petri dish, the population grows exponentially and then crashes when it suddenly runs out. The same thing actually is the cause of plankton blooms from rivers polluted with too much nutrients such as agricultural runoff and fertiliser. The comparison is also made with humans that so far on the grand scheme of things, we have behaved no differently. Unfortunately the actual evidence supports this. Anarchism is the only political philosophy that seems remotely capable of rising or attempting to rise above running society based on our most primitive biological instincts. Authoritarian socialism unfortunately retains the trappings of power within it's structure and so does not really break from the past. Capitalism and all the other tyrannies were just derivations of the basic instincts of greed, fear and desire to maximise the number of kin, through the acquisition of resources..,

9. Disaster or Sanity - The Road Ahead.
If we allow the capitalists to continue to control the situation, as in the past, the wholly destructive path will continue. They will try to continue with industrial society as it is, repression will greatly increase, (it already is), human kind will begin a fairly long descent as without widely available cheap energy, economies will collapse, industrial agriculture will stall, and world population which rose more or less in synchronisation with cheap energy (first coal then oil) will track it on the downward path. Resource wars will break out. Iraq is the first venture in the current episode. It's true though, in a sense all wars have been resource wars to some extent. The big question is; will it go nuclear. Who knows?

From About Us: is the product of international co-operation between anarchist groups and individuals who agree with our editorial statement (see below). It is intended to further communciation, discussion and debate within the global anarchist movement. ...We identify ourselves as anarchists and with the "platformist", anarchist-communist or especifista tradition of anarchism.
(21 March 2006)
A very long analysis - one of the very few writings from the anarchist movement to take peak oil seriously. -BA

Food, sustainability, and the environmentalists

Tom Philpott, Gristmill
...The cheap-oil problem has certainly gained traction among greens. Blogs devoted to "peak oil" abound; this very blog seems like one at times. Most of these discussions, though, devolve into sniping about biofuels and hybrids. It's important to wonder how we'd get around in an era of super-high oil prices.

But I don't understand why more people aren't worried about what we'd eat.

...Why is it so difficult to get people interested in the politics of food? In a culture where food production takes place in such abstraction, food becomes banalized into minimal rituals of ingestion, digestion, and expulsion. Food, when we do think of it, becomes a kind of sport, another spectacle to consume: chefs puffing like fullbacks on Iron Chef, Emmeril bellowing idiotically like some sort of high-school football coach.

Can sustainable agriculture feed the world? That depends, I suppose, on what you're trying to sustain. But I seriously doubt that industrial agriculture -- or its bastard child, industrial-organic -- can for much longer.
(21 March 2006)
The Oil Drum has an article devoted to Philpott's essay with many comments.

Investments based on peak oil are critical for individuals and will contribute to the development of alternative energy sources

Chris Ciovacco, Ciovacco Capital Management
Kurt Cobb’s (view article) position that Peak Oil investing doesn’t really matter in the long run represents a defeatist’s position. There are at least two significant reasons for individuals, institutions, corporations, and governments to invest using the concept of Peak Oil as a guide:

  • R&D: Capital invested in alternative energy companies, as well as traditional oil companies, drives the stock prices of those companies higher. As the stock prices of these companies rise, so does their financial strength and ability to increase research and development activities that are critical to reducing the severity of the impact of Peak Oil. The act of investing in energy stocks, or physical oil via options contracts, indirectly draws attention (people will notice when gas is at $5.00 a gallon) to the problems associated with Peak Oil. As oil prices rise, so will the profile of Peak Oil.

  • Life goes on: Even in the worst-case scenarios, such as a severe global recession, people will still have to exist, eat, and provide shelter for themselves and their family. Obviously, access to additional financial resources would be helpful in any time of economic downturn or crisis.

In the event that you agree with these positions, how does an individual or institution allocate their investment capital to (a) create a profitable portfolio, and (b) encourage more research and development of alternative energy sources?

Before we can attempt to answer that question, it is important to understand some basic concepts that may shape the investing landscape in the event of a global energy shortage.
(21 March 2006)
Ciovacco goes on to outline specific investing strategies, a subject which Energy Bulletin generally avoids. As Kurt Cobb wrote in his article, there are numerous websites which cover peak oil and investments if you are interested in pursuing the subject. -BA

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